Your Chances of Getting the Flu Or Being Left-Handed September 30, 2008March 11, 2017 SURPRISED I thought the bill would pass – and that the Dow would drop 300 points because the markets delight in not doing the obvious. ‘Buy on the rumor, sell on the news,’ runs the old saw. Meaning that if something good is expected to happen, buy before it happens – and sell when it does. Instead, in a display of irresponsibility unusual even for Congress, the bill failed. (John McCain and George Bush were supposed to deliver 100 votes; they delivered only 65. Democrats were supposed to deliver 120 votes; they delivered 140.) So the market really dropped. Surprises move markets. (‘Buy on the rumor, sell BIG if the news fails to materialize.’) The 777 point drop, at roughly 7% – lucky sevens! – was nothing like the 22.6% (509 point) drop of October 19, 1987. Then again, a lot of stocks dropped more than 7% yesterday (just as a lot of them dropped more than 22.6% October 19, 1987) – the Dow tends to be stodgy compared to smaller stocks. So as painful as 7% is, for the average portfolio, which is less conservative, yesterday was even worse. I assume the rescue plan will pass later this week. Many others must be assuming the same thing or the market would have dropped more yesterday. If no rescue plan does pass, we could have a problem worse – at least in some ways – than any economic problem we’ve seen before, because our economy is so much more complex and interconnected – and so much more leveraged. There were no credit cards in 1929. No home equity loans. No no-money-down mortgages. The National Debt was less than 20% of Gross Domestic Product; today it approaches 70% (up from 30% when Reagan/Bush took over). And who can even quantify the leverage of some of our more esoteric financial derivatives. A true collapse of the kind Congress is being asked to avert could also hurt worse because the era of cheap domestic resources – oil gushers and firewood aplenty – seems to have waned. And because we have more to lose. As Roaring as the Twenties were, families didn’t need air-conditioning to be happy – or flat screen TVs or washer/dryers or SUVs. There were no such things. All that said, don’t get too scared. Congress will pass a bill. And unlike 1929, we have FDIC insurance, we have Social Security, we have unemployment insurance. NOT SURPRISED From the January 2005 edition of The Only Investment Guide You’ll Ever Need: I am dismayed by the reelection of George Bush. Yes, my taxes are likely to stay low, but I don’t see how we become more prosperous if much of the world hates us . . . if we are adding to our national debt at a tremendous rate . . . if we are investing in missile systems instead of education . . . if we are giving tax incentives to encourage the purchase of Hummers rather than fuel-efficient vehicles. And that just begins the list. Under either Bush or Kerry, we would have faced challenges: Terrorism, which even when it doesn’t strike costs us dearly (security guards make us safer but they do not make us richer). Globalization, which will make the whole world more prosperous in the long run, including us, but which threatens our manufacturing base and puts high-wage jobs at risk of being teleported abroad. And more. (The likelihood of high energy prices for a very long time could be another.) But under Bush, I see the problems just getting worse, not better. [ . . . ] When Alan Greenspan spooked the world by talking about ‘irrational exuberance’ in December of 1996, the Dow was 6500. Well, we’ve all worked very hard and smart these last few years, and earnings are up and we’ve built the Internet and laid a zillion miles of fiber optic cable and made astonishing breakthroughs in medicine-we’re richer than we were-so maybe 6500 on the Dow is no longer irrational at all. . . . ☞ But 14,000 sure was. And even once the bailout does pass, we’ll want to be realistic. I think we have to view the next decade as an exciting opportunity for our nation to tighten its belt, rebuild its infrastructure, achieve energy independence, and repair its balance sheet. At which point, in real terms (who knows what inflation or deflation will do the actual number), the Dow might reach 14,000 again. For all our problems, we also have tremendous strengths. And technological progress is an economic tailwind. But as the last 8 years have so tragically shown (and as the 8 years before that also showed, by contrast), who runs the show really matters. Which brings us to . . . HOW SURPRISING WOULD A PALIN PRESIDENCY BE? This piece by Bob Rice (Three Moves Ahead: What Chess Can Teach You About Business) takes the fairly conservative view that it would be a one in six or seven chance if John McCain were elected. My view, of course, is that a McCain Presidency alone – never mind a handoff to Governor Palin – would be a calamity. Our country and the world yearn for a fresh start. Our youth, in particular, yearn for an inspirational call. We can do this. But it is not four more years of Republican leadership that will provide the fresh start. And it is not John McCain who is best suited to issue to our youth – who are our future – that inspirational call. But what if it did become a Palin presidency? Rice helps us think through what a one in six or seven chance means. If McCain is elected, he notes, a Palin Presidency is more likely than your getting the flu this winter. Or about as likely as your rolling doubles with a pair of dice. A Palin presidency would be three times more likely than that either one of the presidential candidates were left-handed. (And as it happens, both are.) HOW SCARY WOULD IT BE? Newsweek’s Fareed Zakaria puts the chance of a Palin Presidency, if we elect Senator McCain, at about one in five. Others put it higher still. But the point is – unless you’d sleep well knowing you had a round of Russian roulette to play tomorrow, a six-gun to your left temple – you really need to decide whether you’d be okay with a Palin presidency. Zakaria is not. Like the conservative columnist I linked to yesterday, he thinks she should step down. On CNN yesterday he said, ‘it’s not that she doesn’t know the right answer; it’s that she clearly does not understand the question.’ To her claim of ‘executive experience,’ Zakaria responds that 85% of Alaska’s budget comes from oil revenues, and that her main job is in distributing that oil money to the citizenry: ‘This is good training to be president of Saudi Arabia, not the United States.’ The whole clip is worth watching. We live in interesting times.
Senator McCain; Paul Newman September 29, 2008March 11, 2017 McCAIN: IF YOU WATCH NO OTHER CLIP Watch this one – less than 90 seconds. It’s the judgment thing. McCAIN: JUMPING THE GUN The McCain campaign was so pleased with their man’s performance Friday they released an ad saying he had won – several hours before the debate began. McCAIN: DISRESPECTING THE COUNTY Have you seen Sarah Palin in the swimsuit contest? Hot! AND she can field dress a moose, got a D in macro-economics, and can see Russia from her house. I think she’s pretty neat (the creationism stuff and her political views notwithstanding), but one of my formerly-Republican acquaintances put it best: ‘McCain disrespected the country by choosing her to be next in line to be President of the United States.’ CONSERVATIVES LOSING FAITH IN PALIN At least one conservative columnist, Kathleen Parker writing for the National Review, calls Governor Palin ‘clearly out of her league.’ No one hates saying that more than I do. Like so many women, I’ve been pulling for Palin wishing her the best, hoping she will perform brilliantly. I’ve also noticed that I watch her interviews with the held breath of an anxious parent, my finger poised over the mute button in case it gets too painful. Unfortunately, it often does. My cringe reflex is exhausted. ☞ She calls for Palin to step aside. But as noble and patriotic as that would be, it wouldn’t matter. The fact would remain that, faced with a hugely important decision – and with six months to make it – Senator McCain entrusted the future of our country, should he be sidelined, to her. These are seriously challenging times. They require serious, brilliant, thoughtful people who make carefully considered decisions. Which brings us to . . . ELITISM Nobody likes the smart kids. Maybe Doogie Howser; maybe Malcolm (in the middle). But those were TV scripts written by smart kids, for ratings. In real life, the smart kids had better dumb it down. Have you noticed how even John Kerry – who used the phrase ‘who among us’ when responding to a question about NASCAR (‘who among us doesn’t love NASCAR?’) – was persuaded somehow to drop half the G’s from his gerunds? (Tryin’ to be a regular guy.) Fine. But in every other field, we seek and celebrate excellence. The most talented athlete, not the one who runs like us. The most talented singer, not the one who sounds the way we do in the shower. The teacher of the year. The most skilled surgeon. The rocket scientist who is a rocket scientist. So, sure, a President does need to be ‘of the people.’ But the Rhodes Scholar who came from nothing and went to Yale Law School, who lives and breathes public policy and keeps a billion statistics straight in his head (think President Clinton) really may serve us better than the guy who got into Yale because of his dad, writes off his first 40 years to youthful indiscretion, and failed in business despite his father’s connections (our current affable leader). Do we want a man born in a log cabin who made it through law school and became an Illinois State senator based on his brains, good judgment and eloquence (think Abe Lincoln) . . . . . . a man raised on food stamps who became President of the Harvard Law Review and an Illinois State senator, then a United States senator, based on his brains, good judgment and eloquence, whose presidential bid is backed by Warren Buffett, Susan Eisenhower, and Hillary Clinton? . . . a man in his prime who can do more than one thing at a time? Or do we want a guy more like George W. Bush, great to party with, descended from and married to ‘royalty’ (to the extent America has such a thing), whose presidential bid is backed by all-Enron-roads-lead-to Phil Gramm; whose campaign is run by lobbyists (and by the same guys who slimed him in South Carolina in 2000); who won’t release his medical records; and who, for all we honor his service – as we should – is, arguably, past his straight-talking prime? # COOL HAND I met Paul Newman three times. First in 1968, when he was Harvard’s Hasty Pudding Man of the Year. I was a member of the Pudding – not the theatrical part (no talent; nonplussed by guys in drag), just the eating and drinking part – and was somehow one of a half dozen students who got to host him for a drink before the ceremony. He had just made Cool Hand Luke, wherein he eats 50 hard-boiled eggs in an hour, so we asked him about that. (As I recall, the answer was: yeah, he really ate them.) He was unbelievably cool and gracious: just the right mix of ironic skepticism over the award (the Hasty Pudding Theatrical Society is not exactly the Royal Shakespeare Society) – and twinkle of the eye. ‘You may not remember,’ I said to him, mustering a twinkle of my own 22 years later at a fundraiser to defeat Jesse Helms, ‘but twenty-two years ago, you were Hasty Pudding Man of the Year and you came and had a drink with us and told us about the hardboiled eggs and I just had to say hello thanks for all you’ve done and are doing.’ He responded graciously: with just the right mix of ironic skepticism over the absurdity of my compliment – and twinkle of his eye. Finally, I met him and his wife of 50 years, Joanne Woodward, at their home in Westport last summer, 2007, when he was already not well, but still magnetic and unbelievably gracious. A fundraiser for the DNC. Lemonade in their ‘barn.’ Oscars and movie posters everywhere. He welcomed us and spoke of the urgent need to get our country back on track. And so . . . rest in peace, Paul Newman. We’re trying.
Sarah Clips – And Advice For Living September 26, 2008March 11, 2017 GENERAL ADVICE To get a leg up in life, keep your feet on the ground, your ear to the ground, your nose to the grindstone, your head on your shoulders, your shoulder to the wheel, your eye on the ball, your finger on the pulse, your chin up and your hand in. Being limber helps. MORE SPECIFIC ADVICE: CHARLES’S MARVELOUS INVENTION In our family, I am generally the one who tries not to waste things (‘you’re going to eat that?’ Charles will say of a perfectly good leftover) on the theory that ‘best if bought before’ gives you another few days to consume it (surely they don’t expect you to eat it right there at the check-out) . . . plus what may be weeks or months more in the refrigerator, when it is not, perhaps, ‘best,’ but still ‘very good,’ ‘just fine,’ or, at worst, ‘edible.’ I am only halfway through a half gallon of apple cider marked ‘ENJOY BY 06/29/08’ but still enjoying it. And not because it’s become hard cider – it’s still sweet, and only, at most, a tiny bit off. My point in this is not to poison you – do not under any circumstances follow my example expecting me to accept liability for the consequences. This is microbial madness. Rather, my point is that it is I, not my profligate beloved, who generally comes up with ways to scrimp or save. And so it is with no small pride, if a touch of surprise, I tell you that Charles has truly gotten with the program, turning out lights, riding his bike to work, buying lemons for decoration (a centerpiece of lemons already being cheaper than flowers, and then you can eat them) (as in: lemonade) – and generally living lighter on the land. All brought into sharp focus the other day when he came up with something entirely new. One of those, why didn’t *I* think of that? moments. You may get your shirts back from the dry cleaner differently, or – truly living light on the land – you may just wash them in cold water and hang then on a line to dry. But we get ours folded in individual clear plastic bags. The bags are made from natural gas, which is better than oil; but they’re still no friend to the environment. Likewise, the various Hefty, Glad, and Ziplock bags – not to mention Saran Wrap – we use to save the aforementioned leftovers. So here’s the breakthrough: instead of throwing out the shirt baggies, Charles realized, we can put them in the drawer with the Ziplocks, each one of which costs anywhere from a nickel to a quarter, depending on the size. And while a shirt baggie won’t work well for everything, for many things it works just fine – saving that nickel or quarter, and cutting roughly in half the number of disposable plastic bags we consume. (Speaking of which, these are really handy, too, and they stack.) Ta-da! THE SARAH CLIPS ‘I have a record of putting my country first. And that’s why I chose Sarah Palin to handle our unprecendented economic challenges and lead the Free World should I become incapacitated or die.’ – John McCain* * The first sentence is a literal quote. The second sentence – not spoken by him – follows ineluctably. No? SARAH PALIN AT HER BEST Watch her on CBS News explaining why Alaska’s being next to Russia really is an important foreign policy credential: COURIC: You’ve cited Alaska’s proximity to Russia as part of your foreign policy experience. What did you mean by that? PALIN: That Alaska has a very narrow maritime border between a foreign country, Russia, and on our other side, the land– boundary that we have with– Canada. It– it’s funny that a comment like that was– kind of made to– cari– I don’t know, you know? Reporters– COURIC: Mock? PALIN: Yeah, mocked, I guess that’s the word, yeah. COURIC: Explain to me why that enhances your foreign policy credentials. PALIN: Well, it certainly does because our– our next door neighbors are foreign countries. They’re in the state that I am the executive of. And there in Russia– COURIC: Have you ever been involved with any negotiations, for example, with the Russians? PALIN: We have trade missions back and forth. We– we do– it’s very important when you consider even national security issues with Russia as Putin rears his head and comes into the air space of the United States of America, where– where do they go? It’s Alaska. It’s just right over the border. It is– from Alaska that we send those out to make sure that an eye is being kept on this very powerful nation, Russia, because they are right there. They are right next to– to our state. SARAH SILVERMAN AT HER BEST I hesitate to include this link, because Sarah uses language grandchildren shouldn’t – and it’s not even bleeped. Then again, it’s gone mega-viral, so you’ve probably seen it already anyway. SUSPENDING HIS CAMPAIGN Two comments from many on WashingtonPost.com: abc3 said, “If McCain were serious about suspending political activity to work on the settlement, he would not have blindsided Obama by issuing his press statement before he and Obama had agreed on their bipartisan statement. At that point, he chose political advantage over bipartisanship.” GoHuskies2004 wrote, “…He blindsides Obama, and then he talks about bipartisanship out of the other side of his mouth. Even this conservative can see right through this ridiculous effort…” ☞ It would have been more impressive if they had been deadlocked before he got to Washington and then reached a deal. Instead, they appeared to have reached a deal – and then he got there. Let’s hope for better today. WAMOOPS INDEED Well, I’m sorry. If it’s any consolation (and I know it’s not), the friend who had me thinking this might be a good idea lost tens of millions of his own. I hope you lost less.
Lipstick September 25, 2008March 11, 2017 ‘Presidents need to be able to do more than one thing at a time. I’m planning to debate on Friday.’ – Barack Obama JEB BARTLETT’S ADVICE TO BARACK OBAMA It’s the next best thing to The West Wing. Click here. CONSERVATIVE ANDREW SULLIVAN ON CONSERVATIVE JOHN McCAIN I’m a couple of weeks late in passing this on. But still: McCain’s Integrity By Andrew Sullivan 10 Sep 2008 01:40 pm For me, this surreal moment – like the entire surrealism of the past ten days – is not really about Sarah Palin or Barack Obama or pigs or fish or lipstick. It’s about John McCain. The one thing I always thought I knew about him is that he is a decent and honest person. When he knows, as every sane person must, that Obama did not in any conceivable sense mean that Sarah Palin is a pig, what did he do? Did he come out and say so and end this charade? Or did he acquiesce in and thereby enable the mindless Rovianism that is now the core feature of his campaign? So far, he has let us all down. My guess is he will continue to do so. And that decision, for my part, ends whatever respect I once had for him. On core moral issues, where this man knew what the right thing was, and had to pick between good and evil, he chose evil. When he knew that George W. Bush’s war in Iraq was a fiasco and catastrophe, and before Donald Rumsfeld quit, McCain endorsed George W. Bush against his fellow Vietnam vet, John Kerry in 2004. By that decision, McCain lost any credibility that he can ever put country first. He put party first and his own career first ahead of what he knew was best for the country. And when the Senate and House voted overwhelmingly to condemn and end the torture regime of Bush and Cheney in 2006, McCain again had a clear choice between good and evil, and chose evil. He capitulated and enshrined torture as the policy of the United States, by allowing the CIA to use techniques as bad as and worse than the torture inflicted on him in Vietnam. He gave the war criminals in the White House retroactive immunity against the prosecution they so richly deserve. The enormity of this moral betrayal, this betrayal of his country’s honor, has yet to sink in. But for my part, it now makes much more sense. He is not the man I thought he was. And when he had the chance to engage in a real and substantive debate against the most talented politician of the next generation in a fall campaign where vital issues are at stake, what did McCain do? He began his general campaign with a series of grotesque, trivial and absurd MTV-style attacks on Obama’s virtues and implied disgusting things about his opponent’s patriotism. And then, because he could see he was going to lose, ten days ago, he threw caution to the wind and with no vetting whatsoever, picked a woman who, by her decision to endure her own eight-month pregnancy of a Down Syndrome child in public, that he was going to reignite the culture war as a last stand against Obama. That’s all that is happening right now: a massive bump in the enthusiasm of the Christianist base. This is pure Rove. Yes, McCain made a decision that revealed many appalling things about him. In the end, his final concern is not national security. No one who cares about national security would pick as vice-president someone who knows nothing about it as his replacement. No one who cares about this country’s safety would gamble the security of the world on a total unknown because she polled well with the Christianist base. No person who truly believed that the surge was integral to this country’s national security would pick as his veep candidate a woman who, so far as we can tell anything, opposed it at the time. McCain has demonstrated in the last two months that he does not have the character to be president of the United States. And that is why it is more important than ever to ensure that Barack Obama is the next president. The alternative is now unthinkable. And McCain – no one else – has proved it.
How We Got Here September 24, 2008March 11, 2017 James Hickel: ‘I understand the emotional underpinning behind Bill D’s outburst [raging at the Administration over the mess we’re in]. But what is the logical link between Bush Administration’s policies and the current mortgage-fueled banking crisis? Are we saying that the government should have stepped in to put limits on the amount of risk that private mortgage lenders can take on in their portfolios?’ ☞ Yes! If it was obvious to so many people that things were getting nuts, and that chickens would be coming home to roost – and it WAS obvious – it should have been obvious to a competent Administration, hired to look out for problems and mitigate their consequences. (An approaching hurricane like Katrina; a ‘tremendous, immediate’ threat like Bin Laden, the pursuit of whom Bush shut down when he took office; or, yes, a gathering housing crash, with all it would entail.) Some of this may be 20/20 hindsight (how can you possibly know a hurricane is headed your way until minutes before it hits?) – but not THIS. Millions of people getting mortgages without having to put money down or verify any means of repayment? It just had to end badly. But don’t listen to me; listen to former New York Governor Eliot Spitzer. He laid out the order of events in this February Washington Post op-ed just three weeks before his political demise: Predatory Lenders’ Partner in Crime How the Bush Administration Stopped the States From Stepping In to Help Consumers By Eliot Spitzer Thursday, February 14, 2008; Page A25 Several years ago, state attorneys general and others involved in consumer protection began to notice a marked increase in a range of predatory lending practices by mortgage lenders. Some were misrepresenting the terms of loans, making loans without regard to consumers’ ability to repay, making loans with deceptive “teaser” rates that later ballooned astronomically, packing loans with undisclosed charges and fees, or even paying illegal kickbacks. These and other practices, we noticed, were having a devastating effect on home buyers. In addition, the widespread nature of these practices, if left unchecked, threatened our financial markets. Even though predatory lending was becoming a national problem, the Bush administration looked the other way and did nothing to protect American homeowners. In fact, the government chose instead to align itself with the banks that were victimizing consumers. Predatory lending was widely understood to present a looming national crisis. This threat was so clear that as New York attorney general, I joined with colleagues in the other 49 states in attempting to fill the void left by the federal government. Individually, and together, state attorneys general of both parties brought litigation or entered into settlements with many subprime lenders that were engaged in predatory lending practices. Several state legislatures, including New York’s, enacted laws aimed at curbing such practices. What did the Bush administration do in response? Did it reverse course and decide to take action to halt this burgeoning scourge? As Americans are now painfully aware, with hundreds of thousands of homeowners facing foreclosure and our markets reeling, the answer is a resounding no. Not only did the Bush administration do nothing to protect consumers, it embarked on an aggressive and unprecedented campaign to prevent states from protecting their residents from the very problems to which the federal government was turning a blind eye. Let me explain: The administration accomplished this feat through an obscure federal agency called the Office of the Comptroller of the Currency (OCC). The OCC has been in existence since the Civil War. Its mission is to ensure the fiscal soundness of national banks. For 140 years, the OCC examined the books of national banks to make sure they were balanced, an important but uncontroversial function. But a few years ago, for the first time in its history, the OCC was used as a tool against consumers. In 2003, during the height of the predatory lending crisis, the OCC invoked a clause from the 1863 National Bank Act to issue formal opinions preempting all state predatory lending laws, thereby rendering them inoperative. The OCC also promulgated new rules that prevented states from enforcing any of their own consumer protection laws against national banks. The federal government’s actions were so egregious and so unprecedented that all 50 state attorneys general, and all 50 state banking superintendents, actively fought the new rules. But the unanimous opposition of the 50 states did not deter, or even slow, the Bush administration in its goal of protecting the banks. In fact, when my office opened an investigation of possible discrimination in mortgage lending by a number of banks, the OCC filed a federal lawsuit to stop the investigation. Throughout our battles with the OCC and the banks, the mantra of the banks and their defenders was that efforts to curb predatory lending would deny access to credit to the very consumers the states were trying to protect. But the curbs we sought on predatory and unfair lending would have in no way jeopardized access to the legitimate credit market for appropriately priced loans. Instead, they would have stopped the scourge of predatory lending practices that have resulted in countless thousands of consumers losing their homes and put our economy in a precarious position. When history tells the story of the subprime lending crisis and recounts its devastating effects on the lives of so many innocent homeowners, the Bush administration will not be judged favorably. The tale is still unfolding, but when the dust settles, it will be judged as a willing accomplice to the lenders who went to any lengths in their quest for profits. So willing, in fact, that it used the power of the federal government in an unprecedented assault on state legislatures, as well as on state attorneys general and anyone else on the side of consumers. ☞ And then there was Phil Gramm, McCain’s top economic advisor. He was pivotal in assuring that energy traders like Enron and Wall Street securitizers and derivatives traders not be subject to oversight or effective regulation. Welcome to the Financial Crisis of 2008.
TV Ads September 23, 2008March 11, 2017 PRESIDENTIAL TV ADS SINCE 1952 What remarkable snapshots of history. (Thanks, Alan!) And how each one, in its own way, makes you think about the choice we face today. OR ROLL YOUR OWN Now here’s something entirely new – saysmeTV. Your beau or belle is watching his or her favorite cable news channel (say) and suddenly there you are with an ad you’ve sponsored – or even one you’ve made and uploaded – with your name on it. Or maybe you just want to promote your ice cream parlor, in your Zip code only. Fifty bucks and you’re a star.
Say, September 22, 2008March 11, 2017 The government is doing the necessary thing. I think it will work. Calamity will be averted. Tough times will not. It will take years to climb out of the hole that’s been dug. The sun will come out tomorrow, along with some likely succession of inflation, recession, and stagflation, in what order and to what heights, depths, and angst I obviously don’t know. Meanwhile, the astounding updraft of technology will continue to improve most of our lives in many, resource-nonintensive ways. And if we’re smart, we’ll set people to work renewing our infrastructure and achieving energy independence. I feel certain we will do better economically with Obama/Biden and the people who would run their Administration than with McCain/Palin. AND HOW IS THAT HEARTBEAT, ANYWAY? Now here’s a shock: John McCain has high blood pressure. (He’s not quite at the level of my pal Jim Cramer, whose head could explode at any minute, but close.) And it seems there is quite a bit more to his medical history his campaign doesn’t want voters to know about. Click here for a short video reviewing the Senator’s health. Which is relevant, because if he were elected and something happened to him, Sarah Palin would be leader of the free world.* *A job George W. Bush has proved requires more than self-assurance and a belief in low taxes. MEMORABLE LINES For Governor Palin the line is that she can see Russia from her house. For Senator McCain, the line may come from his promise to ‘take on the ol’ boys’ network.’ As Senator Obama put it: ‘Yesterday, John McCain actually said that if he’s President, he’ll take on the – and I quote – ‘ol’ boys network’ in Washington. I am not making this up. This is someone who’s been in Congress for 26 years – who put seven of the most powerful Washington lobbyists in charge of his campaign – and now he tells us that he’s the one who will take on the ol’ boys network. The ol’ boys network? In the McCain campaign, that’s called a staff meeting.’ MEMORY FUNCTION This is a touchy subject, but being President of the United States arguably entails even more responsibility than being a brain surgeon or airline pilot – and it’s a four-year gig (you don’t get to hire him ‘on probation’ for the first 90 days as some employers do, to be sure they’ve made a good choice). So even though I have an obvious partisan bias, I don’t see how it’s not relevant to consider this post: . . . I’m hardly alone in noticing the changes that have occurred in John McCain. People are whispering about his confusion, his slow delivery, his deterioration, but . . . it is not being openly discussed. . . . The latest example was the gaffe over Spain. ‘Finally, Senator, let’s talk about Spain,’ says the interviewer. Would he be willing to invite President Zapatero to the White House? In fairness to Senator McCain, she says Zapatero’s full name quickly – and it’s a mouthful. But she did preface it very clearly with ‘let’s talk about Spain.’ So when Senator McCain answered as if Zapatero were President of Mexico or someplace to its south, it suggested he might not be as sharp as a U.S. President ideally would be. (‘McCain Proposes Sending Troops to South America to Invade Spain,’ Andy Borowitz reported.) Same thing when, repeatedly, on separate occasions, he confused whether Iran is predominantly Sunni or Shiia (it’s Shiia). Or when Senator Lieberman had to help him get straight whom the Iranians were arming (the insurgents, not Al-Qaeda). Here is a site that’s collected 16 foreign policy gaffes you don’t picture President Kennedy making. Or President Nixon or President Carter or President Bush 41 or President Clinton – or President Obama. But which you can picture President Reagan, especially in his second term, having made. There is little reason to think Senator McCain will get sharper under the stress of the Presidency. McCAIN’S CHIEF ECONOMIC ADVISOR One of the good ol’ boys Senator McCain has most confidence in is Phil Gramm (who told us this summer we’re a nation of ‘whiners’). It was he who quarterbacked the McCain economic plan. I have previously noted that all Enron roads seem to lead to Phil Gramm. This post takes the story all the way to the current meltdown. In part: How did we get here? That’s pretty easy to answer. His name is Phil Gramm. A few days after the Supreme Court made George W. Bush president in 2000, Gramm stuck something called the Commodity Futures Modernization Act into the budget bill. Nobody knew that the Texas senator was slipping America a 262 page poison pill. The Gramm Guts America Act was designed to keep regulators from controlling new financial tools described as credit “swaps.” These are instruments like sub-prime mortgages bundled up and sold as securities. Under the Gramm law, neither the SEC nor the Commodities Futures Trading Commission (CFTC) were able to examine financial institutions like hedge funds or investment banks to guarantee they had the assets necessary to cover losses they were guaranteeing. This isn’t small beer we are talking about here. The market for these fancy financial instruments they don’t expect us little people to understand is estimated at $60 trillion annually, which amounts to almost four times the entire US stock market. And Senator Phil Gramm wanted it completely unregulated. So did Alan Greenspan, who supported the legislation and is now running around to the talk shows jabbering about the horror of it all. Before the highly paid lobbyists were done . . . every one from hedge funds to banks were playing with fire for fun and profit. Gramm didn’t just make a fairy tale world for Wall Street, though. He included in his bill a provision that prevented the regulation of energy trading markets, which led us to the Enron collapse. There was no collapse of the house of Gramm, however, because his wife Wendy, who once headed up the Commodities Futures Trading Commission, took a job on the Enron board that provided almost $2 million to their household kitty. And why not? Wendy got a CFTC rule passed that kept the federal government from regulating energy futures contracts at Enron. If John McCain gets elected and chooses Phil Gramm as his Treasury Secretary, which many politico types see as likely, they will be able to talk about the good old days when Gramm was in congress and McCain was in the senate and they were in the midst of the Savings and Loan crisis. The S&L scandal, which may look precious when compared to our present cascade of problems, isn’t hard to understand, either. But it is impossible to take John McCain seriously on our current financial Armageddon since he was dabbling in the historic collapse of 747 S&Ls that occurred during Ronald Reagan’s era. In the early 80s under the Republican president, congress deregulated the savings and loan industry in much the same way that Gramm made sure there were no laws hindering our current financial malefactors on Wall Street. S&Ls simply lobbied until they had less regulation and then began making rampant, unsound investments. The guy who was going the wildest with financial freedom was Charles Keating, who headed up Lincoln Savings and Loan of California. Because the S&L industry had managed to get congress to increase FDIC insurance from $40,000 to $100,000 on deposits, the irresponsible investing of people like Keating began to put taxpayer insurance funds at great risk of loss. Keating placed money in junk bonds and questionable real estate projects and because so many other S&Ls started acting the same way the Federal Home Loan Bank Board (FHLBB) began to push for a regulation that limited these dangerous speculative “direct” investments to 10% of an S&L’s assets. And Keating didn’t like it; he called on a private economist named Alan Greenspan, who promptly produced a study saying that there was no danger in “direct” investments. But that didn’t convince the FHLBB and as further scrutiny showed Lincoln Savings and Loan was making even more historically bad investment decisions, a federal investigation was launched. So Keating called his home state senator John McCain. McCain and four other US senators (known to history as the Keating Five) met with Edwin Gray, then chairman of the FHLBB. McCain had been hesitant to attend but had reportedly been called a “wimp” behind his back by Keating. The message to the FHLBB and Gray from the Keating Five was to lay off Lincoln and cool the investigation. Gray and the FHLBB did not relent but Lincoln stayed in business until 1989 when it collapsed with the rest of the S&L industry. The life savings of more than 20,000 elderly investors disappeared with the failure of Lincoln. Keating went to prison for five years. Charles Keating was John McCain’s pal. They met in 1981 and Keating dumped $112,000 in the McCain campaign bank accounts between ’82 and ’87. A year before McCain met with the FHLBB regulators, his wife Cindy and her father, according to newspaper reports at the time, invested about $360,000 in one of Keating’s shopping centers. The Arizona Republic reported McCain and his wife and their babysitter took nine trips on Keating’s private jet to the Bahamas to stay at the S&L liar’s decadent Cat Cay resort. The senator didn’t pay Keating back for the plane rides until years later when he was under investigation. McCain wasn’t found guilty of anything but bad judgment, which is an historic understatement. Republicans, who led deregulation of the S&L industry, delayed the bailout until after the 1988 election to make sure George H. W. won the White House. The cost to taxpayers for helping these 747 bad actors in the S&L industry was finally estimated at $1.4 trillion. If the bailout had begun in 1986 instead of after the presidential election, the cost would have been contained at $20 billion. ☞ That excerpt might be even more effective if the tone weren’t quite so angry. But you know what? We have a lot to be angry about. ANOTHER OF McCAIN’S TOP ECONOMIC ADVISORS Conservative economist Kevin Hassett is another of the Senator’s top advisors and a truly nice guy – I know him a little. He is the co-author of Dow 36,000: The New Strategy for Profiting From the Coming Rise in the Stock Market, published in 1999, when the Dow was around 11,000. According to Business Week at the time, the book argued that the Dow was already worth 36,000, and should head there in three to five years. Nine years later, it is 11,000. MYM VISTA Can I ask those of you using MYM under Vista – or who tried to use it under Vista but failed – to me-mail me with your experiences? Thanks!
BAM! POW! THWACK! OOF! And wait! Don't Forget Me! FUN! September 19, 2008March 11, 2017 BAM! Republican Senator Chuck Hagel commenting on Senator McCain’s choice in Wednesday’s Omaha World-Herald: ‘She doesn’t have any foreign policy credentials. You get a passport for the first time in your life last year? I mean, I don’t know what you can say. You can’t say anything.’ “I think they ought to be just honest about it and stop the nonsense about, ‘I look out my window and I see Russia and so therefore I know something about Russia.’ That kind of thing is insulting to the American people.” ‘I think it’s a stretch to, in any way, to say that she’s got the experience to be president of the United States.’ P.O.W.! I don’t know how many of these people are kooks, but they do seem sincere. And one of them is a former Republican Senator who served as Vice-Chair of the U.S. Senate Select Committee on POW/MIA Affairs. THWACK! Peter Kaczowka: ‘When Bill D. mentioned the Keating Five Monday, you did not point out that John McCain was one of the Five. According to this overview, ‘By 1987, McCain campaigns had received $112,000 from Keating, his relatives, and his employees – the most received by any of the Keating Five. … After McCain’s election to the House in 1982, he and his family made at least nine trips at Keating’s expense, three of which were to Keating’s Bahamas retreat. McCain did not disclose the trips (as he was required to under House rules) until the scandal broke in 1989.’ ‘ ☞ I didn’t mention it because it’s not clear whether he was guilty of anything more than poor judgment (and, well, not filing a slew of required reports). But since you raise it, I suppose even poor judgment may be relevant in choosing a President. OOF! I refer here to the precarious world financial situation. We will almost surely get through it, because the government is doing what it needs to. But it’s hard to imagine we are anywhere close to home free. (Note that Obama’s tone throughout has been thoughtful and steady; not careening from one emphatic statement to a contradictory one in the course of the day.) Remember how long it took to right the economy after the ‘guns and butter’ policies of the Vietnam era that led to inflation that led to steep recession and – because Vietnam just cost so much – pinched our prosperity? Well, it’s hard to see how this Iraq war . . . that we’ve put entirely on a credit card . . . won’t have similar, if not entirely predictable, effects. It has weakened us – militarily, diplomatically, and, for sure, economically. With the right leadership and hard work, we will dig our way out: rebuilding our infrastructure, improving our balance sheets, regaining much of our lost stature in the world, and propelling our economic growth and quality of life through dazzling technological advances. All that is possible. And uniquely American. But it will not be quick or painless. And it is not guaranteed. We have to make smart choices. FUN! After a week like this, don’t we deserve a little? I’d tell you what it is, but it’s more fun if you don’t know what to expect. (It’s not political!) You may have seen shorter versions on TV; this one is only on YouTube.
The Financial Mess September 18, 2008March 11, 2017 I think Sarah Palin may be in over her head. Which is a problem, because I think John McCain may be, too. John McCain has said the Governor ‘knows more about energy than probably anyone else in the United States of America.’ Yet the Governor told the country that Alaska accounts for 20% of America’s energy production, when the true number, as noted on last night’s NBC Nightly News, is 3.5%. Shouldn’t the nation’s foremost energy expert be at least fairly close to right about something so basic to her field of expertise? It’s like an astronomer saying the earth is 16 million miles from the sun when it is in fact 93 million miles from the sun. The ratio of inaccuracy is the same. Not something the average person might know – but one Senator McCain looks up to as an expert? The Palin campaign told us she’s been to Iraq and Ireland. But the Alaska National Guard, which she commands, says no, she never set foot in Iraq (it was Kuwait) – and that her visit to Ireland consisted of touching down to refuel. Perhaps most telling is her decision to keep repeating the campaign’s McCain-approved lie – it is really hard to call it anything else – that when others favored the Bridge to Nowhere, she shut it down. In fact, as you can see in the NBC report, this is simply not true. And before some of my friendly antagonists – whose readership I do appreciate – rush to email me, yet again, that Obama once referred to ’57 states,’ I would remind you, first, that 57 is much closer to 50 than 20% is to 3.5% (and much closer to accurate than going to Iraq is to not going to Iraq, or than stopping a bridge is to not stopping a bridge) . . . and, second, that what Obama was referring to, in the context of the primary campaign, was the 57 entities in whose primary contests he had to compete (except that I think it was actually 56 – the 50 states, the District of Columbia, Puerto Rico, American Samoa, Guam, the Virgin Islands and Democrats Abroad – who cares?). Remember when the Republicans skewered Al Gore for claiming to have visited a disaster site with FEMA head James Lee Witt when in fact it turned out he had visited 17 disaster sites with Witt but this particular one, with Witt’s deputy? This was supposed to show that Gore wasn’t trustworthy – you should vote instead for the guy promising a humble foreign policy, a balanced budget, and tax cuts skewed to those at the bottom end of the economic ladder. You know: the kinda guy you could trust, and who, unlike Gore, would be on hand with a crack FEMA Administrator like James Lee Witt if disaster struck. NOT! So now they’re doing it again. You can’t trust Obama – he was President of the Harvard Law Review. That makes him an elitist (raised by a single mother on food stamps). You want John McCain, who’s an average Joe like you (with $520 loafers, too many houses to count, and a private jet). You can’t trust Joe Biden – he is Chairman of the Foreign Relations Committee. You want Sarah Palin, the nation’s foremost energy expert, who can see Russia from her house. MISS CONGENIALITY Roberta Taussig: ‘You may like Sarah Palin, but I sure don’t. I’ve known women like her in church – always bright smiles and high energy but cold as ice and stubborn as that lipstick-less pitbull and absolutely certain she knows right from wrong on everything from God’s will to how to decorate the pews to how to raise everyone else’s children. She scares the bejesus out of me.’ THE REAL McCAIN – 2 If you haven’t seen this video, you should. AIG The government did the right thing. And given that this company once had a market cap of $180 billion, buying 80% of it for $85 billion could, conceivably, not be the worst investment the taxpayers ever made. (Plus it prevented a global meltdown.) THE FINANCIAL MESS Greg Bandy: ‘This column from your archives late last year seems appropriate.’ ☞ Jeez! Why didn’t I read that? THE FINANCIAL MESS – 2 Few things are more obnoxious than a writer quoting himself. (And few writers more fear being thought obnoxious, because of the scar left in the seventh grade after Mr. Theodore had left the room and Danny Shindler – I think it was Danny – led the class in a full bore discussion of how obnoxious I was.) But now that Greg’s got me going, here‘s another, from June 24. It concludes: And what about even just a plain old vicious cycle of falling housing prices leading to less consumption leading to recession leading to job loss leading to more foreclosures and bigger government deficits leading to even less faith in the dollar leading to inflation leading to higher long-term interest rates leading to higher mortgage rates leading to yet lower home prices leading to . . . a new, youthful Administration, swept into office with a huge mandate to redirect our deficits away from Iraq and tax-cuts-for-the-wealthy, toward rebuilding America’s infrastructure; setting bold goals; and inspiring and empowering our estimable citizenry to rise to the very real challenges we face. It is a uniquely American mantra: Yes, we can.
Four More Wars! Four More Wars! September 17, 2008March 11, 2017 Have you seen and read these two? Each takes five minutes, but I found them to be 10 minutes well spent. TO A HAMMER, EVERY PROBLEM LOOKS LIKE A NAIL This video starts out feeling alarmist and manipulative, both of which, to a certain extent, it probably is. But the more I thought about it, the more I decided it is alarming. War is what John McCain knows. War is what he predicts. And watching this, it’s a little hard to picture his being any more cautious in his definitions of ‘imminent threat’ and ‘last resort’ than George W. Bush was. EXPLOSIVE V. UNFLAPPABLE BETWEEN THE LINES Jonathan Alter A Reality Check On ‘Change’ Being labeled a ‘maverick’ sounds good to the public, but it makes it hard to forge bipartisan deals. NEWSWEEK issue date Sep 22, 2008 So far the fall campaign has majored in Sarah Palin, with a minor in the false ads launched (though rarely widely aired) by John McCain. Rather than debating whether Barack Obama voted to teach sex education to kindergartners (he didn’t) or called Sarah Palin a pig (he didn’t), it would be nice if the central dynamic of this contest were about, say, the record and temperament of each candidate. Is that asking too much? To that end, let’s go back to Palin’s acceptance speech in St. Paul. “Listening to him [Obama] speak, it’s easy to forget that this is a man who has authored two memoirs but not a single major law or reform-not even in the state Senate,” Palin said. “In politics there are some candidates who use change to promote their careers. And then there are those, like John McCain, who use their careers to promote change. They’re the ones whose names appear on laws and landmark reforms, not just on buttons and banners, or on self-designed presidential seals.” That last crack refers to the Obama campaign’s idiotic effort last spring to make their man seem presidential with a silly seal. As zingers go, Palin’s was justified. But the rest of what she said in that section of her speech is as phony as a moose in Manhattan. Obama served eight years in Springfield, and has been in Washington nearly four so far. In the Illinois state Senate, he authored about a half-dozen “major laws” on issues ranging from ethics to education. The best example of his leadership style was bipartisan legislation to require the videotaping of police interrogations, which is now a national model. Obama brought together police, prosecutors and the ACLU on a win-win bill that simultaneously increased conviction rates and all but ended jailhouse beatings. In Washington he has his name on three important laws: the first major ethics reform since Watergate; a much-needed cleanup of conventional weapons in the former Soviet Union, and the “Google for Government” bill, an accountability tool that requires notice of all federal contracts to be posted online. Besides that, Obama hasn’t been around long enough to get much done. McCain served four years in the House and has been in the Senate almost 22 so far. But he, too, has authored fewer than a half-dozen major laws. Trying to fix immigration counts for something, but nothing passed. So while McCain deserves credit for the landmark 2002 McCain-Feingold campaign-finance reform bill, the only other major law on which his office says his “name appears” (Palin’s standard) is the “McCain Amendment” prohibiting torture in the armed forces. But that has little meaning because of a bill this year, supported by McCain, that allows torture by the CIA. Under longstanding government practice, military intelligence officers can be temporarily designated as CIA officers (“sheep-dipped” is the bureaucratic lingo) when they want to go off the Army field manual. In other words, the government can still torture anyone, any time. McCain caved on an issue he insists is a matter of principle. The single domestic issue that McCain gets passionate about is pork-barrel politics (“earmarking”), the 200-year-old process by which members of Congress slip in goodies for their constituents outside the normal appropriations system. Earmarks account for less than 2 percent of the budget; the “Bridge to Nowhere” is offensive but amounts to the cost of a few hours in Iraq. McCain claims he has never sought earmarks for Arizona. This is mostly true. But the vast majority of all the bills he has sponsored in Congress have been favors for Arizona’s Native American population. While the Indians deserve it, the difference from earmarks is procedural. Both amount to bringing home the bacon. McCain did important work with John Kerry in 1995 to pave the way for normalization of relations with Vietnam, and he’s been a fierce if occasional enemy of Pentagon waste. But that’s about it. Given his claims of two decades of “making change,” his record of legislative achievement is surprisingly thin. Nothing big on the economy, education, health care, law enforcement or other major issues. One reason for the sparse record is McCain’s history of unpopularity with his GOP Senate colleagues. Being labeled a “maverick” sounds good to the public but makes it hard to get bills passed. Besides helping pave the way for some judicial nominees in 2005, he isn’t known for forging bipartisan deals that stick. Consider the 2002 McCain-Bayh national-service bill to expand AmeriCorps to 250,000 participants. At last week’s Service Nation Summit in New York, McCain grudgingly endorsed his own bill, now called Hatch-Kennedy. But he’s rarely mentioned it on the trail or done anything to advance it. Part of the problem is McCain’s explosive temper. He blows up, then apologizes and is quickly forgiven. The forgiveness is “directly related to an appreciation of what he has suffered [in Vietnam],” says a Democrat who didn’t want to be named talking about a colleague. “The thought of his being president sends a cold chill down my spine,” Republican Sen. Thad Cochran told The Boston Globe in January. “He is erratic. He is hotheaded. He loses his temper and he worries me.” Cochran, a McCain supporter, now says McCain has learned to control his emotions better. But I’ve spoken to four senators and two former senators in recent weeks who believe Cochran’s concerns are widely shared in the Senate. Five of the six think that McCain is temperamentally unsuited to the presidency. None would speak for the record. Palin’s right that McCain has at least tried to “use his career to promote change,” even if he hasn’t succeeded. But she’s wrong to deny the same to Obama. The faith-based community organizing Obama undertook (and that Palin continues to trash) exemplifies the very idea of putting social change before selfish career. Why else take a job for a fraction of what he could have made elsewhere? As for temperament, Obama is unflappable, perhaps to a fault. Record and temperament. They might not be campaign issues, but they tell us a lot more about the future president than all the trivia that passes for news at the moment. © 2008 Newsweek